AI Building-Block Stocks Now Beat Big Tech Giants, Says UBS

A major change is happening in the world of technology stocks, and one of the world's biggest banks says it's "extraordinary."

According to research from UBS (a large Swiss investment bank), companies that build the "infrastructure" behind artificial intelligence (AI) are now set to do better than most of the famous "Magnificent Seven" tech giants.

What are the "Magnificent Seven"? This is a nickname for seven huge U.S. technology companies whose stocks (small ownership pieces of a company) have driven much of the market's gains. They are:

• Apple (AAPL)
• Microsoft (MSFT)
• Amazon (AMZN)
• Alphabet/Google (GOOGL)
• Meta (META)
• Nvidia (NVDA)
• Tesla (TSLA)

What are "hyperscalers" and "AI infrastructure"?

• Hyperscalers are giant companies (like Amazon and Google) that run enormous data centers and cloud services — basically the online "engine rooms" that power the internet.
• AI infrastructure companies make the physical building blocks needed for AI to work — things like memory chips and specialized computer parts.

The key takeaway: UBS's research team, called Holt and led by analyst John Talbott, believes the companies making these AI building blocks will "vastly outperform" most of the big tech names going forward.

Some of the companies mentioned in this shift include:

• Samsung (005930) — up over 8%
• SK Hynix (000660) — up nearly 11%
• Micron (MU) — a U.S. chipmaker

These are makers of memory chips, a crucial part of AI systems.

Why does this matter for beginners? For a long time, investors focused on the well-known Big Tech giants. UBS is now pointing to a possible change in leadership — suggesting the "picks and shovels" companies that supply AI's raw materials could become the new winners.

In short, the money and attention in tech may be moving from the household-name giants to the lesser-known companies that build AI's foundations. If UBS is right, this could reshape where investors put their money in the years ahead.

This is an AI-generated summary. Read the original article at: https://www.marketwatch.com/story/ai-infrastructure-stocks-have-overtaken-big-tech-hyperscalers-in-an-extraordinary-shift-says-ubs-research-arm-7c425a02?mod=mw_rss_topstories